Deutsche Bank Pays $60 Million To Settle Gold-Manipulation Lawsuit

Tyler Durden's picture

2016 is shaping up as the year when countless conspiracy theories will be confirmed to be non-conspiracy fact: from central bank rigging of capital markets, to political rigging of elections, to media rigging of public sentiment, and now, commercial bank rigging of both silver and gold. In short, "tinfoil hat-wearing nutjobs living in their parents basement" were right all along.

In early October, we reported that "In A Major Victory For Gold And Silver Traders, Manipulation Lawsuit Against Gold-Fixing Banks Ordered To Proceed," however one bank was exempt: Deutsche Bank. The reason why was known since April, when we first reported that Deutsche Bank had agreed to settle the class action lawsuit filed in July 2014 accusing a consortium of banks of plotting to manipulate gold and silver. Among the charges that Deutsche Bank effectively refused to contest were the following:

  • employment of a manipulative device claims
  • bid-rigging, and unjust enrichment.
  • price fixing and unlawful restraint
  • price manipulation claims
  • aiding and abetting and principal-agent claims.

An affidavit filed in October shed more light on the settlement process:

The negotiations with Deutsche Bank over the material terms of the Settlement took place over several months starting in December 2015 and continuing until the Deutsche Bank Settlement Agreement was executed on September 6, 2016.

 

Following initial phone calls with Deutsche Bank’s counsel in December 2015, Lowey and Grant & Eisenhofer engaged in lengthy negotiations with Deutsche Bank’s counsel over the material terms of the settlement, including the amount of the settlement consideration, the scope of the cooperation to be provided by the Deutsche Bank Defendants, the scope of the releases, and the circumstances under which the parties would have the right to terminate the settlement.

 

During the course of the negotiations, Class Counsel presented what we perceived to be the strengths and weaknesses of the claims and defenses, as well as Deutsche Bank’s litigation exposure.

In February 2016, we reached an agreement with Deutsche Bank on the amount of the settlement, subject to the negotiation of other material terms of the deal. For example, given that this is the first settlement in the case, it was our view that the cooperation provisions of the deal were extremely important to our ability to maximize the overall recovery for the class against the Non-Settling Defendants. The negotiations as to the scope of the cooperation provisions continued for several months.

 

On April 13, 2016, counsel for Deutsche Bank and Class Counsel signed a Binding Settlement Term Sheet (“Term Sheet”). The Term Sheet set forth the terms on which the parties agreed, subject to the negotiation of a full Settlement Agreement, to settle Plaintiffs’ claims against Deutsche Bank. At the time the Term Sheet was executed, Class Counsel was well-informed about the legal risks, factual uncertainties, potential damages, and other aspects of the strengths and weaknesses of the claims and defenses asserted.

 

By letter dated April 13, 2016, the Parties reported to the Court via ECF that the Term Sheet had been executed, and advised the Court that the Term Sheet would be superseded by a formal settlement agreement. ECF No. 116.

 

The parties negotiated the Deutsche Bank Settlement Agreement over the course of the next several months. The negotiations over the terms of the Deutsche Bank Settlement Agreement included  various material terms over which the parties had substantial disagreement, requiring significant give and take on both sides. To that end, drafts of the Deutsche Bank Settlement Agreement went back and forth between the parties, and numerous contested issues were raised, negotiated and resolved, including without limitation, continuing negotiations over the scope of Deutsche Bank’s cooperation (see ¶ 4(A)-(G)), the scope of the releases (see ¶ 12 (A)-(C)), and the circumstances under which the parties could terminate the Settlement (see ¶ 21).

 

Thus, the Deutsche Bank Settlement Agreement, which was executed (along with the Supplemental Agreement) on September 6, 2016, was the culmination of arm’s-length settlement negotiations that had extended over many months.

 

The Deutsche Bank Settlement was not the product of collusion. Before any financial numbers were discussed in the settlement negotiations and before any demand or counter-offer was ever made, we were well informed about the legal risks, factual uncertainties, potential damages, and other aspects of the strengths and weaknesses of the claims against Deutsche Bank.

 

The Deutsche Bank Settlement involves a structure and terms that are common in class action settlements in this District. The consideration that Deutsche Bank has agreed to pay is within the range of that which may be found to be fair, reasonable, and adequate at final approval.

There was just one thing missing: the settlement amount. Then, on October 17, the first part of the answer was revealed when according to court filings, Deutsche Bank had agreed to pay $38 million to settle the silver manipulation litigation.

The settlement, which was disclosed in papers filed in Manhattan federal court, concludes one of many recent lawsuits in which investors have accused banks of conspiring to rig the precious metal markets. However, until Deutsche Bank's payment of $38 million to settle silver manipulation allegations, there was never any formal closure.

* * *

Then, last night, two months after the silver settlement, Deutsche Bank agreed to pay another $60 million to settle the other side of the antitrust litigation: that of rigging gold.

As Reuters first reported, the preliminary settlement was filed on Friday with the U.S. District Court in Manhattan, and requires a judge's approval. As part of the settelement, Deutsche Bank has denied any wrongdoing, and with the two settlements, and some $98 million out of pocket, it is clear of any future liability regarding precious metals manipulation.

The case is one of many in the Manhattan court in which investors accused banks of conspiring to rig rates and prices in financial and commodities markets.

As we reported previously, in an Oct. 3 decision, U.S. District Judge Valerie Caproni in Manhattan said investors could pursue much of their lawsuit against the other four banks named in the anti-trust lawsuit which include Barclays, Bank of Nova Scotia, HSBC and Societe Generale.

In October, Vincent Briganti, a lawyer for the investors, said the silver settlement deal provides "substantial monetary compensation plus cooperation from Deutsche Bank in the continued prosecution of this important case against the non-settling defendants." He has yet to comment on the gold settlement. Alas, as a result of the settlement, yet another discovery process has been scuttled, preventing the public from having a glimpse into what really went on in precious metal "markets."

* * *

So who gets to benefit from the settlement? This is what the lawyer said on the silver settlement disclosed in early October:

We have reason to believe that there are at least hundreds of geographically dispersed persons and entities that fall within the Settlement Class definition. The Settlement Class includes traders of COMEX Silver Futures contracts, anyone who traded in physical silver based on the Silver Fix, and traders in various silver derivatives.

The same will likely be applicable to gold traders following Friday's monetary settlement.

The other beneficiary, of course, is the class of investors, people and "conspiracy theorists" who claimed all along that gold and silver were subject to rigging in various forms throughout the years. Well, you were right. However, we wouldn't hold much hope for getting any substantial monetary rewards. By the time the settlement is done, there will likely be at best a few hundred dollars left per claimant.

The good news is that this formal closure will open the door for other, similar lawsuits - for both silver and gold manipulation - now that the seal has been broken.

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BadDog's picture

Out of petty cash kept in a cigar box.

WTFMOFO's picture

So when do I get my settlement check?

BaBaBouy's picture

Its ALL about Paper VS Physical ...
Be Aware~ You get what you pay for.

(Paper GOLD could be as high as 500 to 1 Phys Oz}

Yukon Cornholius's picture

I knew my (lost) gold felt more valuable this morning.

auricle's picture

I haven't received my check in the mail. MFers

boattrash's picture

Hell, I haven't got my check from the Silver Settlement yet...It's a big fuckin club, and we ain't in it.

SumTing Wong's picture

So, seriously, how do we become part of the Settlement Class? I lost tons of money on both gold and silver. We won't count the times when I made money...

boattrash's picture

Sorry man, my comment was light-hearted joking, as I've only bought small amounts of physical.

That said, I bet it's like most settlement agreements, some fucking fed.gov alphabet agency gets to keep it, while the little guys get hosed...

beemasters's picture

And folks, that's how you end the manipulation. /sarc

HungryPorkChop's picture

And of course, not one of these COCKSUCKERS will go to jail. 

And of course, the untold millions of people they swindled and lied too will not get back ONE FUCKING RED CENT of what they lost.

The only sad part is we know this is just the tip of the iceberg! 

We need rope and short drops otherwise this type of shit will not end. 

putaipan's picture

That is like a bucketful right?

robertsgt40's picture

That's odd. I wonder why there's been no mention by MSM? ;-)

tmosley's picture

Wondering the same. I can get documentation of my gold and silver buys--all based on spot. The settlements are ridiculously low. Despite tens of thousands of dollars of transactions, would probably only get a few cents. Ridiculous.

logicalman's picture

If I robbed a bank of $1 mill, would I get a $1,000 fine?

 

wanderer9641's picture

you have too many zeros - try 1 or 10 dollars for a fine

Kirk2NCC1701's picture

Did DB pay from their Derivatives or the Gold held at the Fed?

Mr. Schmilkies's picture

so does this mean gold is now no longer manipulated?  hahahahaha right.

Magnix's picture

I wondered about that too. Im sure its STILL manipulated by other company.

Raffie's picture

So they paid a whole $60mil ? LOL

So the Take A Penny dish is now empty.

 

TheElder's picture

Make billions, pay millions. Crime sure doesn't pay, does it?

flaunt's picture

Yeah it's just the cost of doing "business" in the corrupt financial arena.  Nobody is ever held accountable to any signfiicant degree that would deter future bad behavior.  They probably think of it like a tax.

Raffie's picture

It is also called "Don't do as we do, do as we say to have a nice day"

MadHatt's picture

How much money did they make doing this?

Im going to assume it is much more then the fines imposed. 

 

Thank god we have the CFTC and GATA to make sure everything is on the level /s.

wmbz's picture

This has to be Faux News! Everyone knows that Banksters Inc. does everything on the up&up. For the good of the serfs.

Douche Bank would never lie, cheat and steal from ya!

The Count's picture

NO MORE OUT OF COURT SETTLING!

I WANT TO SEE THESE IDIOTS IN PRISON!

Uranium Mountain's picture

Now where did I put those receipts? 

Robert Trip's picture

Bankers settle out of court no matter how much misery they cause the people they shaft.

A homeboy in the Hood gets 2 years for stealing a loaf of bread to feed his shortie.

back to basics's picture

Who said crime doesn't pay?

Cautiously Pessimistic's picture

Wow...what a joke.  

 

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. ~Frederic Bastiat, The Law

Robert Trip's picture

Iceland knows how to deal with fuckers like these.

Life in the pen or cover them with cow's blood and throw them to the sharks.

Viking justice.

gigaweb's picture

60 whole million dollars.  That'll learn 'em.

The settlement should taken a lesson from Dr. Evil, who was a bit ignorant of what a million dollars really is in today's toilet-paper financial system.

paint it red call it hell's picture

And to whom the big spoils go????

The attorneys of course.....

DuneCreature's picture

Whoa! .. I believe they call this a precedent.

This could start a trend. ......... They call that trending, don't they?

Claw back on thieving behavior. .. I like where this is going.

That's some trending that could take right off for the stars. ... Lord knows, there is plenty of thieving and price manipulation to get the trending started.

Live Hard, It Might Even Start Raining Banksters, Die Free

~ DC v4.0

LoveTruth's picture

After robbing billions from investors 60mln is like a 6 cents fine fortruck driver disregarding speed limits and road signs for years. 

c2nnib2l's picture

I'm sure Deutche Bank is not the only one out there. 

 

JPMorgan's picture

Conspiracy FACT !!! Tylers.

GATA can finally take fucking victory lap.

 

NotApplicable's picture

They should have to pay in specie, at $35 an oz.

Offthebeach's picture

Ok so the bank rate is fixed, the gold/silver rate is fixed, the central banks fix the interest rate, govs set the labor rate, you can or can't do or make. Without gov permission....but we have free market.

Conax's picture

Who gets the fine money?
Oh yeah, them.

Justice is served, with gravy.

Justin Case's picture

They can give it to a good cause, the Clinton Foundation. Pizza for everyone

Spectre's picture

Total Bullshit, a pittance of a settlement, meanwhile they made $60 Billion in profits. Fuck DB in the ass.

Calculus99's picture

In in the UK and I can hear the sniggering coming from Germany.

Wouldn't you be laughing, you make god knows how much via criminal manipulation, theft basically, and then pay probably 10% of that in a fine and of course no prison time for anyone involved. Pluys, I might add, no fucking names either.

TRN's picture

Exactly! This practice undermines our institutions, not the Russian propaganda. This is what makes us citizens cynical, not Putin's blots!